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Congress issues final report on Iran-Contra scandal


After nearly a year of hearings into the Iran-Contra scandal, the joint Congressional investigating committee issues its final report. It concluded that the scandal, involving a complicated plan whereby some of the funds from secret weapons sales to Iran were used to finance the Contra war against the Sandinista government in Nicaragua, was one in which the administration of Ronald Reagan exhibited “secrecy, deception, and disdain for the law.”

Naming several members of the Reagan administration as having been directly involved in the scheme (including National Security Advisor John Poindexter and deceased CIA Director William Casey), the report stated that Reagan must bear “ultimate responsibility.” A number of government officials were charged and convicted of various crimes associated with the scandal.A minority opinion by some of the Republican members of the committee contained in the report argued that the hearings had been politically motivated. They also suggested that while Reagan administration officials might have used poor judgment, the ultimate end—continuing the fight against the leftist regime in Nicaragua—was a worthy goal.

The differences in opinion, while partially reflective of partisan biases, were also evidence of a question that had plagued U.S. policy makers since the early days of the Cold War: in the battle against communism, were the ends more important than the means?


Congressional committees investigating the Iran–Contra affair

The congressional committees investigating the Iran–Contra affair were committees of the United States House of Representatives and of the United States Senate formed in January 1987 to investigate the Iran–Contra affair. The committees held joint hearings and issued a joint report. The hearings ran from 5 May 1987 to 6 August 1987, and the report was published in November, with a dissenting Minority Report signed by six Republican Congressmen and two Republican Senators. [1]


Congress issues final report on Iran-Contra scandal - HISTORY

The underlying facts of Iran/contra are that, regardless of criminality, President Reagan, the secretary of state, the secretary of defense, and the director of central intelligence and their necessary assistants committed themselves, however reluctantly, to two programs contrary to congressional policy and contrary to national policy. They skirted the law, some of them broke the law, and almost all of them tried to cover up the President's willful activities.

What protection do the people of the United States have against such a concerted action by such powerful officers? The Constitution provides for congressional oversight and congressional control of appropriations, but if false information is given to Congress, these checks and balances are of lessened value. Further, in the give and take of the political community, congressional oversight is often overtaken and subordinated by the need to keep Government functioning, by the need to anticipate the future, and by the ever-present requirement of maintaining consensus among the elected officials who are the Government.

The disrespect for Congress by a popular and powerful President and his appointees was obscured when Congress accepted the tendered concept of a runaway conspiracy of subordinate officers and avoided the unpleasant confrontation with a powerful President and his Cabinet. In haste to display and conclude its investigation of this unwelcome issue, Congress destroyed the most effective lines of inquiry by giving immunity to Oliver L. North and John M. Poindexter so that they could exculpate and eliminate the need for the testimony of President Reagan and Vice President Bush.

Immunity is ordinarily given by a prosecutor to a witness who will incriminate someone more important than himself. Congress gave immunity to North and Poindexter, who incriminated only themselves and who largely exculpated those responsible for the initiation, supervision and support of their activities. This delayed and infinitely complicated the effort to prosecute North and Poindexter, and it largely destroyed the likelihood that their prompt conviction and appropriate sentence would induce meaningful cooperation.

These important political decisions were properly the responsibility of Congress. It was for the Committees to decide whether the welfare of the nation was served or endangered by a continuation of its investigation, a more deliberate effort to test the self-serving denials presented by Cabinet officers and to search for the full ramifications of the activities in question. Having made this decision, however, no one could gainsay the added difficulties thrust upon Independent Counsel. These difficulties could be dealt with only by the investment of large amounts of additional time and large amounts of expense.

The role of Independent Counsel is not well understood. Comparisons to United States attorneys, county district attorneys, or private law offices do not conceive the nature of Independent Counsel. Independent Counsel is not an individual put in charge of an ongoing agency as an acting U.S. attorney might be he is a person taken from private practice and told to create a new agency, to carry out the mission assigned by the court. It is not as though he were told to step in and try a case on the calendar of an ongoing office with full support of the Government behind him, as it would be behind the United States attorney. He is told to create an office and to confront the Government without any expectation of real cooperation, and, indeed, with the expectation of hostility, however veiled. That hostility will manifest itself in the failure to declassify information, in the suppression of documents, and in all of the evasive techniques of highly skilled and large, complex organizations.

The investigation into Iran/contra nevertheless demonstrates that the rule of law upon which our democratic system of government depends can be applied to the highest officials even when they are operating in the secret areas of diplomacy and national security.

Despite extraordinary difficulties imposed by the destruction and withholding of records, the need to protect classified information, and the congressional grants of immunity to some of the principals involved, Independent Counsel was able to bring criminal charges against nine government officers and five private citizens involved in illegal activities growing out of the Iran/contra affair.

More importantly, the investigation and the prosecutions arising out of it have provided a much more accurate picture of how two secret Administration policies -- keeping the contras alive ``body and soul'' during the Boland cut-off period and seeking the release of Americans held hostage by selling arms to Iran -- veered off into criminality.

Evidence obtained by Independent Counsel establishes that the Iran/contra affair was not an aberrational scheme carried out by a ``cabal of zealots'' on the National Security Council staff, as the congressional Select Committees concluded in their majority report.1 Instead, it was the product of two foreign policy directives by President Reagan which skirted the law and which were executed by the NSC staff with the knowledge and support of high officials in the CIA, State and Defense departments, and to a lesser extent, officials in other agencies.

Independent Counsel found no evidence of dissent among his Cabinet officers from the President's determination to support the contras after federal law banned the use of appropriated funds for that purpose in the Boland Amendment in October 1984. Even the two Cabinet officers who opposed the sale of arms to Iran on the grounds that it was illegal and bad policy -- Defense Secretary Caspar W. Weinberger and Secretary of State George P. Shultz -- either cooperated with the decision once made, as in the case of Weinberger, or stood aloof from it while being kept informed of its progress, as was the case of Shultz.

In its report section titled ``Who Was Responsible,'' the Select Committees named CIA Director William Casey, National Security Advisers Robert C. McFarlane and John M. Poindexter, along with NSC staff member Oliver L. North, and private sector operatives Richard V. Secord and Albert Hakim. With the exception of Casey who died before he could be questioned by the OIC, Independent Counsel charged and obtained criminal convictions of each of the men named by Congress. There is little doubt that, operationally, these men were central players.

But the investigation and prosecutions have shown that these six were not out-of-control mavericks who acted alone without the knowledge or assistance of others. The evidence establishes that the central NSC operatives kept their superiors -- including Reagan, Bush, Shultz, Weinberger and other high officials -- informed of their efforts generally, if not in detail, and their superiors either condoned or turned a blind eye to them. When it was required, the NSC principals and their private sector operatives received the assistance of high-ranking officers in the CIA, the Defense Department, and the Department of State.

Of the 14 persons charged criminally during the investigation, four were convicted of felony charges after trial by jury, seven pleaded guilty either to felonies or misdemeanors, and one had his case dismissed because the Administration refused to declassify information deemed necessary to the defendant by the trial judge. Two cases that were awaiting trial were aborted by pardons granted by President Bush. As this report explained earlier, many persons who committed crimes were not charged. Some minor crimes were never investigated and some that were investigated were not solved. But Independent Counsel believes that to the extent possible, the central Iran/contra crimes were vigorously prosecuted and the significant acts of obstruction were fully charged.

Fundamentally, the Iran/contra affair was the first known criminal assault on the post-Watergate rules governing the activities of national security officials. Reagan Administration officials rendered these rules ineffective by creating private operations, supported with privately generated funds that successfully evaded executive and legislative oversight and control. Congress was defrauded. Its appropriations restrictions having been circumvented, Congress was led to believe that the Administration was following the law. Numerous congressional inquiries were thwarted through false testimony and the destruction and concealment of government records.

The destruction and concealment of records and information, beginning at the twilight of Iran/contra and continuing throughout subsequent investigations, should be of particular concern. Oliver North's destruction of records in October and November 1986 caused an irretrievable loss of information to the executive agencies responsible for regulating clandestine activities, to Congress, and to Independent Counsel. John Poindexter's efforts to destroy NSC electronic mail nearly resulted in comparable damage. CIA Costa Rican Station Chief Joseph F. Fernandez attempted to hide phone records that would have revealed his contacts with Enterprise activities.

This sort of obstruction continued even after Independent Counsel's appointment. In the course of his work, Independent Counsel located large caches of handwritten notes and other documents maintained by high officials that were never relinquished to investigators. Major aspects of Iran/contra would never have been uncovered had all of the officials who attempted to destroy or withhold their records of the affair succeeded. Had these contemporaneous records been produced to investigators when they were initially requested, many of the troublesome conflicts between key witnesses would have been resolved, and timely legal steps taken toward those who feigned memory lapses or lied outright.

All of this conduct -- the evasions of the Executive branch and the Congress, the lies, the conspiracies, the acts of obstruction -- had to be addressed by the criminal justice system.

The path Independent Counsel embarked upon in late 1986 has been a long and arduous one. When he hired 10 attorneys in early 1987, Independent Counsel's conception of the operational conspiracy -- with its array of Government officials and private contractors, its web of secret foreign accounts, and its world-wide breadth -- was extremely hazy. Outlining an investigation of a runaway conspiracy disavowed by the President was quite different from the ultimate investigation of the President and three major agencies, each with the power to frustrate an investigation by persisting in the classification of non-secret but embarrassing information. Completing the factual mosaic required examining pieces spread worldwide in activities that occurred over a three-year period by officials from the largest agencies of government and a host of private operatives who, by necessity, design and training, worked secretly and deceptively.

The Role of Independent Counsel

Given the enormous autonomous power of both the Legislative and Executive branches in the modern state, the rightly celebrated constitutional checks and balances are inadequate, alone, to preserve the rule of law upon which our democracy depends.

As Watergate demonstrated, the checks and balances reach their limits in the case of criminal wrongdoing by Executive branch officials. The combination of an aggressive press, simple crimes, the White House tapes, and principled defiance by Department of Justice-appointed counsel all combined to bring Watergate to its conclusion without an independent counsel statute. It was apparent then, however, as it should be now in light of Iran/contra, that the competing roles of the attorney general, as a member of the Cabinet and presidential adviser on the one hand and chief law enforcement officer on the other, create an irreconcilable conflict of interest.

As Iran/contra demonstrated, congressional oversight alone cannot make up for deficiencies that result when an attorney general abandons that law-enforcement role in cases of Executive branch wrongdoing. Well before Attorney General Meese sought an independent counsel in December 1986, he had already become, in effect, the President's defense lawyer, to the exclusion of his responsibilities as the nation's top law enforcement officer. By that time, crucial documents had already been destroyed and false testimony given.

Congress, with all the investigatory powers it wields in the oversight process, was not able to uncover many of these documents or disprove much of that false testimony. That inability is structural, and does not result from ill will, impatience, or character flaw on the part of any legislator. With good reason, Congress's interest in investigating Executive branch wrongdoing extends no farther than remedying perceived imbalances in its relations with the Executive branch. Except in the case of impeachment, Congress's interest does not, and should not, extend to the law-enforcement goals of deterrence, retribution and punishment.

In normal circumstances, these law-enforcement goals are the province of the Justice Department, under the direction of the attorney general. As the chief law enforcement officer of the United States, the attorney general represents the people of the United States -- not the President, the Cabinet or any political party. When the attorney general cannot so represent the people, the rule of law requires that another, independent institution assume that responsibility. That is the historic role of the independent counsel.

Problems Posed by Congressional Immunity Grants

The magnitude of Iran/contra does not by itself explain why Independent Counsel took so long to complete the task assigned by the Special Division which appointed him. The word ``independent'' in Independent Counsel is not quite accurate as a description of his work. Time and again this Independent Counsel found himself at the mercy of political decisions of the Congress and the Executive branch. From the date of his appointment on December 19, 1986, Independent Counsel had to race to protect his investigations and prosecutions from the congressional grants of immunity to central Enterprise conspirators. At the same time, he had to wait almost one year for records from Swiss banks and financial organizations vital to his work. Once Congress granted immunity, Independent Counsel had to insulate himself and his staff from immunized disclosures, postponing the time he could get a wider view of the activities he was investigating.

Despite extraordinary efforts to shield the OIC from exposure to immunized testimony, the North and Poindexter convictions were overturned on appeal on the immunity issue. While the appellate panels did not find the prosecution was ``tainted'' by improper exposure to the immunized testimony of North or Poindexter, they ruled that the safeguards utilized by the trial courts did not ensure that witnesses' testimony was not affected by the immunized testimony.

Although Independent Counsel warned the Select Committees of the possibility that granting use immunity to principals in the Iran/contra matter might make it impossible to prosecute them successfully, he has never contended that Congress should refrain from granting use immunity to compel testimony in such important matters as Iran/contra. In matters of great national concern, Independent Counsel recognizes that intense public interest and the need for prompt and effective congressional oversight of intelligence activities may well force the Congress to act swiftly and grant immunity to principals.

But, in light of the experience of Independent Counsel in the Iran/contra cases, Congress should be aware of the fact that future immunity grants, at least in such highly publicized cases, will likely rule out criminal prosecution.

Congressional action that precludes, or makes it impossible to sustain, a prosecution has more serious consequences than simply one less conviction. There is a significant inequity when more peripheral players are convicted while central figures in a criminal enterprise escape punishment. And perhaps more fundamentally, the failure to punish governmental lawbreakers feeds the perception that public officials are not wholly accountable for their actions. In Iran/contra, it was President Reagan who first asked that North and Poindexter be given immunity so that they could exculpate him from responsibility for the diversion. A few months later, the Select Committees did that -- granting immunity without any proffer to ensure honest testimony.

The Classified Information Procedures Act

After Independent Counsel brought the principal operational conspiracy cases, he was forced to dismiss the central conspiracy charges against North, Poindexter, Hakim and Secord because the Administration, which had opposed the charge in the first instance, refused to declassify the information needed to proceed in the North case. Later, the entire case against Joseph F. Fernandez, the CIA's station chief in Costa Rica, was dismissed when the Administration declined to declassify information necessary for the trial. In both instances, Independent Counsel concluded that the classified information in question was already publicly known, but the Administration declined to engage in meaningful consultation with Independent Counsel before making its decision.

In any prosecution of a national security official, a tension inevitably arises between the Executive branch's duty to enforce the criminal law and its obligation to safeguard the national security through protecting classified information. The Classified Information Procedures Act (CIPA) was enacted in 1980 to assist the Department of Justice and other Executive branch agencies in resolving this tension in a manner consistent with our nation's commitment to the rule of law. Under CIPA, only the attorney general has the authority to make the decision between the Government's need to enforce the law and the Government's need to withhold information for national security reasons. If the intelligence agencies decline to declassify information deemed necessary by the trial court for the fair trial of a case, only the attorney general can overrule them. Likewise, if the attorney general decides that the information should not be disclosed, he is empowered to file a CIPA 6(e) affidavit to prohibit the disclosure. Current law does not require that the attorney general's decision to withhold classified material from disclosure at trial meet any objective or articulated standard. No court can challenge the substance of a 6(e) affidavit no litigant has standing to contest the attorney general's decision to file one.

The Administration has the power to make the CIPA process work when it wants to, as in the case of alleged spies or in the trial of former Panamanian dictator Manuel Noriega. Since CIPA became law in 1980, no attorney general killed a prosecution by filing a 6(e) affidavit until Attorney General Richard Thornburgh forced the dismissal of the Fernandez case in November 1989. As the Fernandez and North cases show, the Administration also has the power to derail the CIPA process when, for reasons of its own, it chooses not to make it work.

The attorney general's unrestricted CIPA 6(e) authority becomes questionable when an independent counsel, rather than the Justice Department, has jurisdiction over the prosecution. An independent counsel is appointed only when the attorney general determines, after a preliminary investigation, that high-level officials within the Executive branch may have been involved in criminal activity or that the Department of Justice may be perceived to have a conflict of interest. The problems of conflict are compounded in CIPA because the issue involves classified information controlled by an intelligence agency in a case charging one or more of the officials of that agency in criminal activity. Congress could not have intended that CIPA -- a statute designed to facilitate trials involving classified information -- be used by the attorney general to control prosecutions of independent counsel.

The Iran/contra investigation will not end the kind of abuse of power that it addressed any more than the Watergate investigation did. The criminality in both affairs did not arise primarily out of ordinary venality or greed, although some of those charged were driven by both. Instead, the crimes committed in Iran/contra were motivated by the desire of persons in high office to pursue controversial policies and goals even when the pursuit of those policies and goals was inhibited or restricted by executive orders, statutes or the constitutional system of checks and balances.

The tone in Iran/contra was set by President Reagan. He directed that the contras be supported, despite a ban on contra aid imposed on him by Congress. And he was willing to trade arms to Iran for the release of Americans held hostage in the Middle East, even if doing so was contrary to the nation's stated policy and possibly in violation of the law.

The lesson of Iran/contra is that if our system of government is to function properly, the branches of government must deal with one another honestly and cooperatively. When disputes arise between the Executive and Legislative branches, as they surely will, the laws that emerge from such disputes must be obeyed. When a President, even with good motive and intent, chooses to skirt the laws or to circumvent them, it is incumbent upon his subordinates to resist, not join in. Their oath and fealty are to the Constitution and the rule of law, not to the man temporarily occupying the Oval Office. Congress has the duty and the power under our system of checks and balances to ensure that the President and his Cabinet officers are faithful to their oaths.


Congress issues final report on Iran-Contra scandal - HISTORY

Executive Summary and Summary of Prosecutions:
Final Report Of The Independent Counsel For Iran/Contra Matters

ratitor's note - What the true scope of Iran-Contra included:

The scope and limits of the investigation of the Independent Counsel, charged with examining certain exposed secret government operations of the Reagan administration, was defined by then Attorney General Edwin Meese. As stated below,

"The evidence indicates that Meese's November 1986 inquiry was more of a damage-control exercise than an effort to find the facts. . . [Meese] had private conversations [with key participants] without taking notes . . . failed . . . to take . . . prudent steps to protect potential evidence . . . [and] gave a false account of what he had been told. . . . The statute of limitations had run on November 1986 activities before OIC obtained its evidence. In 1992, Meese denied recollection of the statements attributed to him by the notes of Weinberger and Regan. He was unconvincing, but the passage of time would have been expected to raise a reasonable doubt of the intentional falsity of his denials if he had been prosecuted for his 1992 false statements."

So the Attorney General, the leading law enforcement officer of the land, who framed the scope and limits of the investigation called "Iran Contra," would himself have been prosecuted for false statements made later concerning his conversations with Secretary of Defense Casper Weinberger and Secretary of State James Baker to say nothing of the fact that as the leading law enforcement officer of the U.S., he failed to fulfill his oath of office to uphold, protect, and defend the constitution of the United States.

In 1989 I interviewed L. Fletcher Prouty for five days concerning his experiences in the US Air Force from 1941 to January 1964 including participating in the creation and then operating the USAF branch of the Pentagon Focal Point Office for the CIA from 1955 to 1963 that provided logistical support for worldwide clandestine operations of the U.S. government. The subject of Iran-Contra came up a number of times in our conversation.

Prouty: As intricate as anything we did in the days we were in this kind of work was handling money. I spent more time, on these papers that I prepared for the methodology of handling covert operations, ("Military Support of the Clandestine Operations of the United States Government" written in 1955. See Military Experiences, Part II, page 42) in devising the money trails as anything else.

That's why I feel in this current business about the Iran-hostage exchange, when you hear these top people talking about the use of the Economy Act of 1932 -- they don't say the year -- they just say the Economy Act, what they are really talking about is this very secret money channel that we established for actual covert operations. It works all right. It's not described in this document (U.S. Government Organization Manual, 1959-1960, page 143. See page 76) at all. But it was a key to how this whole business of covert operations worked. You've got to pay people all the time. . . .

We created a system for this. We created a system where every single credit card turned in on these planes in the clandestine business around the world would arrive at a certain computer center at Dayton, Ohio. From that computer center in Dayton, it would fall into a certain box and we'd pay those bills. Then we'd turn right around and charge CIA -- but we'd do it on internal U.S. Air Force books so nobody knew it. Thus we could follow the movement of every single airplane. If you can't do that, you can't run covert operations. As you heard Colonel North trying to explain what they did, and he can't do it -- it's because the system broke down. They had trouble with the system, they need to go back and rethink the system. A very intricate system. . . .

The money we're talking about is nothing but numbers: so many dollars in the Defense budget that moved into the CIA budget, or vice versa and so many dollars from another budget moving into this budget. We never touched a dollar, we never asked the Sultan of Brunei or anyone else for a couple of million bucks as they say the "Iran-Contra" operators did -- that's utterly ridiculous! If you're going to help some young kids in Honduras that are called the "Contras," you don't go around borrowing millions of dollars to give to some ex-Nicaraguan in a villa in Palm Beach! That's what the Iran-Contra scheme was doing.

During that Iran-Contra fiasco, if we just had a chance to take this one directive, and explain it to Judge Gesell or to Prosecutor Walsh and let them know what the facts of life are, they would have ended that problem in a few days. They wouldn't even need the jury. It's just ridiculous the way this has grown. . . .

We have to look at it several ways. If they reached the point in coming down the levels, the first thing to know is to find out who really made the decision and whether he had that authority. It wasn't Ollie North it wasn't Poindexter it wasn't McFarland. They all worked for people. So you have to go to the people they worked for and say, "Who made the decision?"

The man [Weinberger] who said this Iran-Contra operation was done under the Economy Act made the decision. Because, by saying it was done under the Economy Act, what he is doing is opening the doors of the secret supply channel, which is worth tens of millions of dollars. He had to have the money for it -- meaning the money in the federal budget -- not cash on the barrel, and not cash he got from the King of Saudi Arabia.

He made the decision to release the missiles, and not to sell them to somebody -- in exchange for hostages. When you exchange the missiles for hostages, you don't get any money the hostages are the money, you exchange for hostages. If somebody kidnapped my dog and said he wanted $100, I'd give them the money and I'd take the dog. That's the deal!

The whole situation in this contrived Iran-Contra situation -- from the point when McFarlane went over to Teheran with a cake and a Bible, the whole thing, right there, was explaining itself as a weird, mixed-up exercise. You don't do clandestine exercises that way. There was something terribly wrong with it when it started with a cake and a Bible.

. . . [T]his Iran-Contra deal is the biggest aberration on covert operation I've ever heard of. It simply is not a covert operation at all. Somebody was just handling a lot of money, and Meese created the meaningless name for that game, "Iran-Contra", that was just contrived.

Ratcliffe: What's your sense of the most likely explanation for how things have gone so awry?

Prouty: It's simple. The Iraqis have fought the Iranians since 1981. And in that period the Iraqis have released data that this warfare cost them $60 billion. I'm sure the Iranians fought as hard as the Iraqis did. The Iranians were using U.S. military hardware, because most of their army and navy are supplied with things made in the United States. When the equipment is made in the United States -- like engines or parts -- you have to buy them from the United States nobody else makes that specific military equipment, at least not identical. So you have to buy it from the United States.

So, I believe (without too much concern about the exact record, or the figures) that it must have cost the Iranians about $60 billion to fight the Iraqis. If it did, it means the Iranians purchased (from somebody) parts made in the United States that belonged to the U.S military (or the military suppliers) worth $60 billion. Not a few million. Not a cake and a bible. Sixty billion dollars. They don't want to talk about it.

So they'd rather talk about the cake and the bible and the Contras. That's the role Mr. Meese created to divert the people from the $60 billion and talk about the Contras. When you're talking about the Contras, everything that happened in Iran is quiet. One was supposed to balance the other.

If you go back and look at the newspapers, the Iranian/Contra problem began with a little newspaper saying that weapons from the United States had been exchanged for hostages. That was the problem -- only that. Then, when Mr. Meese went poking around in the papers in the White House, he says he found a memo that the money from that exchange was going to the Contras. He made some funny statements. There's no money from the exchange -- not from that exchange -- and there was no need of giving money to the Contras. But every eye and ear of the members of the Congressional hearings turned to the Contras, and they forgot Iran from that time on. Mr. Meese's gambit succeeded. As simple as that.

Then we get people who have other interests -- and I make no brief for them but people like the Christic Institute -- who amplified on this deal. The next thing you know, everybody's looking at Nicaragua instead of Teheran. Well, that covers up the $60 billion deal we played with Iran. There's your problem.

The money was transferred quietly on paper in the government. And nobody saw it because of the Economy Act principles -- which Weinberger talked about anyway! There's something very much mixed-up in this Iran/Contra thing, because they didn't need the money to transfer in the first place . . . unless someone was stealing it.

UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

    the direct or indirect sale, shipment, or transfer since in or about 1984 down to the present, of military arms, materiel, or funds to the government of Iran, officials of that government, persons, organizations or entities connected with or purporting to represent that government, or persons located in Iran

    the sales of arms to Iran contravened United States Government policy and may have violated the Arms Export Control Act[1]

[1] Independent Counsel is aware that the Reagan Administration Justice Department took the position, after the November 1986 revelations, that the 1985 shipments of United States weapons to Iran did not violate the law. This post hoc position does not correspond with the contemporaneous advice given the President. As detailed within this report, Secretary of Defense Caspar W. Weinberger (a lawyer with an extensive record in private practice and the former general counsel of the Bechtel Corporation) advised President Reagan in 1985 that the shipments were illegal. Moreover, Weinberger's opinion was shared by attorneys within the Department of Defense and the White House counsel's office once they became aware of the 1985 shipments. Finally, when Attorney General Meese conducted his initial inquiry into the Iran arms sales, he expressed concern that the shipments may have been illegal.

    Robert C. McFarlane: pleaded guilty to four counts of withholding information from Congress

At the time President Bush pardoned Weinberger and Clarridge, he also pardoned George, Fiers, Abrams, and McFarlane.

The Basic Facts of Iran/contra

The Iran/contra affair concerned two secret Reagan Administration policies whose operations were coordinated by National Security Council staff. The Iran operation involved efforts in 1985 and 1986 to obtain the release of Americans held hostage in the Middle East through the sale of U.S. weapons to Iran, despite an embargo on such sales. The contra operations from 1984 through most of 1986 involved the secret governmental support of contra military and paramilitary activities in Nicaragua, despite congressional prohibition of this support.

The Iran and contra operations were merged when funds generated from the sale of weapons to Iran were diverted to support the contra effort in Nicaragua. Although this "diversion" may be the most dramatic aspect of Iran/contra, it is important to emphasize that both the Iran and contra operations, separately, violated United States policy and law.[2] The ignorance of the "diversion" asserted by President Reagan and his Cabinet officers on the National Security Council in no way absolves them of responsibility for the underlying Iran and contra operations.

2. See n. 1 above

The secrecy concerning the Iran and contra activities was finally pierced by events that took place thousands of miles apart in the fall of 1986. The first occurred on October 5, 1986, when Nicaraguan government soldiers shot down an American cargo plane that was carrying military supplies to contra forces the one surviving crew member, American Eugene Hasenfus, was taken into captivity and stated that he was employed by the CIA. A month after the Hasenfus shootdown, President Reagan's secret sale of U.S. arms to Iran was reported by a Lebanese publication on November 3. The joining of these two operations was made public on November 25, 1986, when Attorney General Meese announced that Justice Department officials had discovered that some of the proceeds from the Iran arms sales had been diverted to the contras.

When these operations ended, the exposure of the Iran/contra affair generated a new round of illegality. Beginning with the testimony of Elliott Abrams and others in October 1986 and continuing through the public testimony of Caspar W. Weinberger on the last day of the congressional hearings in the summer of 1987, senior Reagan Administration officials engaged in a concerted effort to deceive Congress and the public about their knowledge of and support for the operations.

Independent Counsel has concluded that the President's most senior advisers and the Cabinet members on the National Security Council participated in the strategy to make National Security staff members McFarlane, Poindexter and North the scapegoats whose sacrifice would protect the Reagan Administration in its final two years. In an important sense, this strategy succeeded. Independent Counsel discovered much of the best evidence of the cover-up in the final year of active investigation, too late for most prosecutions.

Scope of Report

This report provides an account of the Independent Counsel's investigation, the prosecutions, the basis for decisions not to prosecute, and overall observations and conclusions on the Iran/contra matters.

Part I of the report sets out the underlying facts of the Iran and contra operations. Part II describes the criminal investigation of those underlying facts. Part III provides an analysis of the central operational conspiracy. Parts IV through IX are agency-level reports of Independent Counsel's investigations and cases: the National Security staff, the private operatives who assisted the NSC staff, Central Intelligence Agency officials, Department of State officials, and White House officials and Attorney General Edwin Meese III.

Volume I of this report concludes with a chapter concerning political oversight and the rule of law, and a final chapter containing Independent Counsel's observations. Volume II of the report contains supporting documentation. Volume III is a classified appendix.

Because many will read only sections of the report, each has been written with completeness, even though this has resulted in repetition of factual statements about central activities.

    supporting military operations in Nicaragua in defiance of congressional controls

The charge was upheld as a matter of law by U.S. District Judge Gerhard A. Gesell even though the Justice Department, in a move that Judge Gesell called "unprecedented," filed an amicus brief supporting North's contention that the charge should be dismissed. Although Count One was ultimately dismissed because the Reagan Administration refused to declassify information necessary to North's defense, Judge Gesell's decision established that high Government officials who engage in conspiracy to subvert civil laws and the Constitution have engaged in criminal acts. Trial on Count One would have disclosed the Government-wide activities that supported North's Iran and contra operations.

Within the NSC, McFarlane pleaded guilty in March 1988 to four counts of withholding information from Congress in connection with his denials that North was providing the contras with military advice and assistance. McFarlane, in his plea agreement, promised to cooperate with Independent Counsel by providing truthful testimony in subsequent trials.

Judge Gesell ordered severance of the trials of the four charged in the conspiracy indictment because of the immunized testimony given by Poindexter, North and Hakim to Congress. North was tried and convicted by a jury in May 1989 of altering and destroying documents, accepting an illegal gratuity and aiding and abetting in the obstruction of Congress. His conviction was reversed on appeal in July 1990 and charges against North were subsequently dismissed in September 1991 on the ground that trial witnesses were tainted by North's nationally televised, immunized testimony before Congress. Poindexter in April 1990 was convicted by a jury on five felony counts of conspiracy, false statements, destruction and removal of records and obstruction of Congress. The Court of Appeals reversed his conviction in November 1991 on the immunized testimony issue.

    donations from foreign countries

Ultimately, all of these funds fell under the control of North, and through him, Secord and Hakim.

North used political fundraisers Carl R. Channell and Richard R. Miller to raise millions of dollars from wealthy Americans, illegally using a tax-exempt organization to do so. These funds, along with the private contributions, were run through a network of corporations and Swiss bank accounts put at North's disposal by Secord and Hakim, through which transactions were concealed and laundered. In late 1985 through 1986 the Enterprise became centrally involved in the arms sales to Iran. As a result of both the Iran and contra operations, more than $47 million flowed through Enterprise accounts.

Professional fundraisers Channell and Miller pleaded guilty in the spring of 1987 to conspiracy to defraud the Government by illegal use of a tax-exempt foundation to raise contributions for the purchase of lethal supplies for the contras. They named North as an unindicted co-conspirator.

Secord pleaded guilty in November 1989 to a felony, admitting that he falsely denied to Congress that North had personally benefited from the Enterprise. Hakim pleaded guilty to the misdemeanor count of supplementing the salary of North. Lake Resources Inc., the company controlled by Hakim to launder the Enterprise's money flow, pleaded guilty to the corporate felony of theft of Government property in diverting the proceeds from the arms sales to the contras and for other unauthorized purposes. Thomas G. Clines was convicted in September 1990 of four tax-related felonies for failing to report all of his income from the Enterprise.


The Senate’s final report on Iran-Contra showed extent to which the investigation had been stonewalled

While some of the inherent problems in the Tower Commission, such as Senator Tower&rsquos conflict of interest and family ties to CIA, have been documented, the fact is that none of the government&rsquos investigations into the matter were able to proceed without obstruction. The final report on Iran-Contra, which has rarely been seen but was found in the CREST archive, makes this explicitly clear.

The report, entitled &ldquoState Department and Intelligence Community Involvement in Domestic Activities Related to the Iran/Contra Affair&rdquo, was issued by the House of Representative&rsquos Committee on Foreign Relations on September 7, 1988. For comparison, the House Select Committee to Investigate Covert Arms Transactions with Iran and the Senate Select Committee On Secret Military Assistance to Iran And the Nicaraguan Opposition finished their hearings in August of 1987 and issued the report that November. Not only was it completed after the Iran-Contra hearings, it used information that had been denied to previous investigations to undermine their findings.

The introductory letter itself makes it clear that &ldquothere are many individuals who were intimately involved in these activities who were never questioned by the Iran/Contra Committees about these matters and who have not been available to any of the other investigations that have been conducted.&rdquo It also makes it clear that they were repeatedly denied documents they had been promised access to.

The overview of the report itself wastes no time in raising important issues that have been largely under-examined: did the State Department funnel money through a classified program to illegally aid the Contras and lobby Congress?

The overview also quickly indicted the Government Accountability Office&rsquos first report. It noted that GAO auditors had said that they would have reevaluated their conclusions about the State Department&rsquos Office of Public Diplomacy for Latin America and the Caribbean (S/LPD) if the GAO&rsquod had access to documents that were later released.

The only investigations that the committee didn&rsquot undermine were the ones that had outlined the illegal activities that surrounded the Iran-Contra affair. The overview simply notes that second GAO report, for instance, found that the S/LPD &ldquogenerally did not follow federal regulations.&rdquo

The committee pulled no punches when it presented its thesis in the overview. According to the report, the State Department office had been &ldquoset up and managed by operatives in the National Security Council (NSC) who maintained close ties with Oliver North and [then] CIA Director Casey.&rdquo

In pointing to the involvement of the State Department, the report raises some of the same issues that led FBI and IRS investigators to want to look at the IRS for involvement in supporting these fundraising initiatives. Much like the additional investigations that this report calls for, it seems that the proposed investigation of the IRS over Iran-Contra remains a phantom.

The report itself mentions a number of specifics regarding the State Department&rsquos involvement in funding Iran-Contra and lobbying Congress, but the opening paragraph of the conclusion is brutal in it brevity. The report alleges that senior CIA and Department of Defense officials &ldquowere deeply involved in establishing nad participating in a domestic political and propaganda operation run through an obscure bureau in the Department of State which reported directly to the National Security Council rather than through the normal State Department channels.&rdquo

The most damning denunciation of the prior investigations, however, comes from the penultimate paragraph of the report. Despite repeated requests, documents &ldquowere never provided to the Iran/Contra Committees nor the Foreign Affairs Committee.&rdquo The State Department had refused to act on the suggestion of its Inspector General that the former S/LPD head be disciplined. The Inspector General for the United States Information Agency had similarly ignored requests to investigate the matter. People heavily involved in these activities had been transferred and promoted elsewhere, often to senior positions within the Government.

The final paragraph calls for an additional investigation &ldquoto determine the extent to which the Department of State was used, and perhaps compromised&rdquo by the CIA and NSC to run a domestic covert operation to manipulate Congress, the media and the public. Currently, there is no indication that this investigation took place.

Later articles will look at some of the specific allegations against S/LPD, but in the meantime you can read the report below.


THE IRAN-CONTRA REPORT: The Overview WALSH CRITICIZES REAGAN AND BUSH OVER IRAN-CONTRA

After a seven-year legal odyssey, the Iran-contra independent prosecutor published his final report today, finding no credible evidence that President Ronald Reagan had broken the law but concluding that Mr. Reagan had "knowingly participated or at least acquiesced" in covering up the scandal.

The report represented the last official word on the $37.6 million investigation by the prosecutor, Lawrence E. Walsh, who seemed to be trying to shape history's judgment on President Reagan's actions and the role his senior aides had played in the tangled arms-for-hostages affair.

Mr. Walsh said he found no evidence that George Bush had violated any criminal statute, though he complained that Mr. Bush had withheld evidence. The prosecutor said that contrary to Mr. Bush's statements, "he was fully aware of the Iran arms sales." Moreover, Mr. Walsh said, Mr. Bush failed to disclose private diary notes and refused to be interviewed as Mr. Walsh wrapped up the inquiry.

In addition, the prosecutor said he had unearthed no indication that either Mr. Reagan or his Vice President and successor, Mr. Bush, knew of a central event in the affair, the diversion of money from the Iran arms sales to the Nicaraguan rebels.

Mr. Reagan and Mr. Bush, who had a chance to review the report before it was published, both repeated today their consistent assertions that they had done nothing wrong. The Web of Evidence

Mr. Walsh's report presented few fresh facts he had disclosed most of his evidence in past legal battles. But he spun a web of documentary evidence and testimony from witnesses to support his view that the public was left with a mistaken impression after Congressional hearings in 1987 that the affair had been a "runaway conspiracy of subordinate officers."

At a news conference today, Mr. Walsh said a cover-up had kept significant information out of the hands of the Congressional investigators in 1987. He suggested that if Congress had gained access to the evidence he subsequently uncovered, Mr. Reagan's impeachment "certainly should have been considered."

As Mr. Walsh persevered on a trail that seemed to be growing cold, Republicans in Congress increasingly pressed him to step down and Mr. Walsh himself became an issue.

In his defense, Mr. Walsh said today that he could not turn away from evidence of wrongdoing in the face of "extraordinary difficulties."

In the report he said he was slowed by the destruction and withholding of records, a heavy lid of secrecy that kept much information from being used in court and Congressional grants of immunity that fatally undercut his ability to prosecute Oliver L. North and John M. Poindexter.

In December 1992, the debate over Mr. Walsh was cut short when Mr. Bush, in a post-election grant of clemency that effectively ended the investigation, granted pardons to former Defense Secretary Caspar W. Weinberger and five other former officials implicated in the affair. Legal Battles Lost

The report is the prosecutor's final act in an inquiry that began in December 1986 after the scandal was first reported in a Lebanese newspaper. But Mr. Walsh's struggle against daunting legal obstacles left his most significant cases in tatters. Among those were convictions of Mr. North, the National Security Council aide, and Mr. Poindexter, Mr. North's superior, on charges of obstructing Congress and other crimes.

Over the years, Mr. Walsh charged 14 people with criminal offenses, primarily efforts to conceal or withhold information from Congress. Eleven people pleaded guilty or were convicted, but the two most celebrated cases, involving Mr. Poindexter and Mr. North, were overturned on appeals.

The inquiry centered on two interwoven operations that Reagan Administration officials carried out in secret in 1985 and 1986 -- activities that buffeted Mr. Reagan's final years in office and haunted Mr. Bush as he unsuccessfully sought a second term. The Genesis

One operation began when Mr. Reagan directed his aides to find a way to support the Nicaraguan rebels, then fighting the Sandinista Government, after Congress barred further military aid. Mr. North and several business associates set up an arms pipeline that operated until a plane was shot down in Nicaragua in October 1986.

A second operation was the attempt to win the release of American hostages in Lebanon by selling arms to Iran, despite an embargo, in the hope that Teheran would use its influence on the Lebanese captors.

Ultimately, Mr. North and his colleagues used some of the proceeds from the arms sales to finance aid and arms for the Nicaraguan rebels.

At his news conference, Mr. Walsh expressed harsher criticism of Mr. Bush than of Mr. Reagan.

"I think President Bush will always have to answer for his pardons," he said. "I think that was the most unjustifiable act. There was no public purpose served by that."

Of Mr. Reagan, the prosecutor said, "He was was carrying out policies he strongly believed in."

Mr. Walsh also said he did not know how his report would affect public attitudes toward Mr. Reagan and Mr. Bush. "Because one type of activity may be subject to criticism, there were other areas of activity that may be subject to praise, and the American public will, with great intelligence, take all that into account," he said. Legal Dispute Ended

Since August, when Mr. Walsh submitted his report to a special panel of three Federal appeals judges, lawyers representing people named in the report have fought to keep it secret. By statute, Mr. Walsh was required to prepare the report, but the judges were not required to release it.

It was not until Friday that some officials named in the report, including Mr. Reagan his Attorney General, Edwin Meese 3d, and Mr. North abandoned their effort to keep the report from being disclosed the appeals panel had issued a ruling saying the only avenue of further appeal was to the Supreme Court.

Mr. Walsh said his inquiry had found that Mr. Reagan George P. Shultz, who was Secretary of State Caspar W. Weinberger, the Defense Secretary William J. Casey, the director of Central Intelligence, and their aides "committed themselves, however reluctantly, to two programs contrary to Congressional policy and contrary to national policy."

"They skirted the law," he said, "some of them broke the law and almost all of them tried to cover up the President's willful activities." ⟺ntasy,' Reagan Lawyer Says

Today Mr. Reagan and his lawyers mounted a furious rebuttal. In a statement from Los Angeles, Mr. Reagan called the report an "encyclopedia of old information, unwarranted conclusions and irresponsible speculation." He said the report was a "self-administered pat on the back and a vehicle for baseless allegations that he could never have proven in court."

Theodore B. Olson, Mr. Reagan's lawyer, offered a more detailed rebuttal in a separate statement, saying Mr. Walsh's conclusion was a "fantasy," a "purely speculative theory based upon misinterpretations of several key facts" and "refuted by overwhelming evidence."

Mr. Olson said Mr. Reagan had insisted on full and complete disclosure of the facts surrounding the affair, had waived executive privilege, had sought a Presidential commission to review the events and had requested the appointment of independent counsel to investigate.

All that, he said, indicated that Mr. Reagan had "followed a consistent course of openness and cooperation." Intramural Dispute, Bush Says

In a statement from Mr. Bush's office in Houston, the former President said the report contributed nothing new. "At the heart of this investigation was a political dispute between the executive and legislative branches over foreign policy," he said. "We must be careful not criminalize constitutional disputes of this kind."

Mr. North, who is seeking the Republican nomination for a Senate seat from Virginia, said in a statement today that the report had no "smoking guns" that could embarrass him. "Walsh fired his last shot, and it was a blank," Mr. North said.

Mr. Walsh said top Reagan aides had deliberately tried to deceive Congress in an effort to hide Mr. Reagan's role in the arms sales.

For the first time publicly, Mr. Walsh also said the effort in 1986 to conceal a possibly illegal shipment of Hawk missiles to Iran in 1985 was led by Mr. Meese. The prosecutor said Mr. Meese "appeared to have spearheaded an effort among top officials to falsely deny Presidential awareness of the Hawk transaction," the report said. 'Totally False,' Meese Replies

The prosecutor said he considered prosecuting Mr. Meese but decided against it, concluding that the passage of time made it difficult to prevail.

In a statement today, Mr. Meese said any allegation of a cover-up was "totally false." He said the report "is patterned after the old Soviet model of justice: you're guilty because I say you're guilty and damn the truth."

But in his report Mr. Walsh said the exposure of the possibly illegal activities in the fall of 1986 generated what he described as "as new round of illegality." During Congressional hearings in 1987, "senior Reagan Administration officials engaged in a concerted effort to deceive Congress and the public about their knowledge of and and support for the operations."

The prosecutor concluded that the President's most senior aides took part in a strategy that made Mr. North and two national security advisers, Robert C. McFarlane and Mr. Poindexter, "scapegoats whose sacrifice would protect the Reagan Administration in it its final two years."

Mr. Walsh said the strategy succeeded. He said he had "discovered much of the best evidence of the cover-up in the final year of the active investigation, too late for most prosecutions."


THE IRAN-CONTRA REPORT: Excerpts From the Iran-Contra Report: A Secret Foreign Policy

In October and November 1986, two secret U.S. Government operations were publicly exposed, potentially implicating Reagan Administration officials in illegal activities. These operations were the provision of assistance to the military activities of the Nicaraguan contra rebels during an October 1984 to October 1986 prohibition on such aid, and the sale of U.S. arms to Iran in contravention of stated U.S. policy and in possible violation of arms-export controls. In late November 1986, Reagan Administration officials announced that some of the proceeds from the sale of U.S. arms to Iran had been diverted to the contras.

As a result of the exposure of these operations, Attorney General Edwin Meese 3d sought the appointment of an independent counsel to investigate and, if necessary, prosecute possible crimes arising from them.

The Special Division of the United States Court of Appeals for the District of Columbia Circuit appointed Lawrence E. Walsh as Independent Counsel on December 19, 1986. . . . Overall Conclusions

The investigations and prosecutions have shown that high-ranking Administration officials violated laws and executive orders in the Iran/contra matter.

Independent Counsel concluded that:

*the sales of arms to Iran contravened United States Government policy and may have violated the Arms Export Control Act

*the provision and coordination of support to the contras violated the Boland Amendment ban on aid to military activities in Nicaragua

*the policies behind both the Iran and contra operations were fully reviewed and developed at the highest levels of the Reagan Administration

*although there was little evidence of National Security Council level knowledge of most of the actual contra-support operations, there was no evidence that any N.S.C. member dissented from the underlying policy keeping the contras alive despite Congressional limitations on contra support

*the Iran operations were carried out with the knowledge of, among others, President Ronald Reagan, Vice President George Bush, Secretary of State George P. Shultz, Secretary of Defense Caspar W. Weinberger, Director of Central Intelligence William J. Casey, and national security advisers Robert C. McFarlane and John M. Poindexter of these officials, only Weinberger and Shultz dissented from the policy decision, and Weinberger eventually acquiesced by ordering the Department of Defense to provide the necessary arms

*large volumes of highly relevant, contemporaneously created documents were systematically and willfully withheld from investigators by several Reagan Administration officials and

*following the revelation of these operations in October and November 1986, Reagan Administration officials deliberately deceived the Congress and the public about the level and extent of official knowledge of and support for these operations.

In addition, Independent Counsel concluded that the off-the-books nature of the Iran and contra operations gave line-level personnel the opportunity to commit money crimes. . . . The White House and Office of the Vice President

As the White House section of this report describes in detail, the investigation found no credible evidence that President Reagan violated any criminal statute. The O.I.C. could not prove that Reagan authorized or was aware of the diversion or that he had knowledge of the extent of North's control of the contra-resupply network. Nevertheless, he set the stage for the illegal activities of others by encouraging and, in general terms, ordering support of the contras during the October 1984 to October 1986 period when funds for the contras were cut off by the Boland Amendment, and in authorizing the sale of arms to Iran, in contravention of the U.S. embargo on such sales. The President's disregard for civil laws enacted to limit Presidential actions abroad -- specifically the Boland Amendment, the Arms Export Control Act and congressional-notification requirements in covert-action laws -- created a climate in which some of the Government officers assigned to implement his policies felt emboldened to circumvent such laws.

Independent Counsel's investigation did not develop evidence that proved that Vice President Bush violated any criminal statute. Contrary to his public pronouncements, however, he was fully aware of the Iran arms sales. Bush was regularly briefed, along with the President, on the Iran arms sales, and he participated in discussions to obtain third-country support for the contras. The O.I.C. obtained no evidence that Bush was aware of the diversion. The O.I.C. learned in December 1992 that Bush had failed to produce a diary containing contemporaneous notes relevant to Iran/contra, despite requests made in 1987 and again in early 1992 for the production of such material. Bush refused to be interviewed for a final time in light of evidence developed in the latter stages of the O.I.C.'s investigation, leaving unresolved a clear picture of his Iran/contra involvement. Bush's pardon of Weinberger on December 24, 1992, preempted a trial in which defense counsel indicated that they intended to call Bush as a witness. . . . History of the Investigation Previously Withheld Documents

One of the major difficulties confronting the continuing investigation was the passage of time since the Iran/contra events had occurred, and the corresponding lack of witness recollection of specific details. To combat this problem, the O.I.C. carefully searched for previously unproduced, contemporaneously created documents such as notes that would reflect on Iran/contra matters.

The search for previously undiscovered documents was fueled also by the fact that most significant Iran/contra witnesses were reluctant to provide truthful information unless they were confronted with difficult-to-refute documentary evidence. Much of the early phase of the continuing investigation focused on contradictions between the prior sworn testimony of Reagan Administration officials and contemporaneously created documents. . . . The Investigation is Closed and Reopened: The Bush Diary

In September 1992, Independent Counsel reported to the special D.C. Court of Appeals panel that appointed him that the investigation was complete, barring unforeseen developments at the upcoming trials of Weinberger and Clarridge. The full resources of the O.I.C. then became trained exclusively on the trial of pending cases and on drafting a final report.

On December 11, 1992, the White House unexpectedly informed Independent Counsel that President Bush had not produced to the investigation previously requested diaries relevant to Iran/contra. The review of Bush's diary notes, and the circumstances surrounding his failure to produce them earlier, required the investigation to reopen.

On December 24, 1992, President Bush pardoned Weinberger, who was to be tried in less than two weeks, and Clarridge, scheduled for trial in March 1993, as well as four others already convicted.

During late December and January 1993 the diaries were produced. They did not justify reopening the investigation. Independent Counsel's efforts to requestion President Bush about Iran/contra matters were thwarted by Bush's insistence that the questioning be limited to the subject of his failure to produce his previously requested diaries. This limitation was unacceptable to the O.I.C., which over the course of its continuing investigation had gathered significant new evidence about which it wanted to question Bush.

President Bush was the first President to grant a pardon on the eve of a trial. The question before Independent Counsel was, and remains, whether President Bush exercised his constitutional prerogative to pardon a former close associate to prevent further Iran/contra revelations. In the absence of evidence that the pardon was secured by corruption, Independent Counsel decided against taking the matter before the Grand Jury.

The continuing investigation resulted in the discovery of large caches of previously withheld contemporaneous notes and documents, which provided new insight into the highly secret events of Iran/contra. Had these materials been produced to congressional and criminal investigators when they were requested in 1987, Independent Counsel's work would have proceeded more quickly and probably with additional indictments.

With the passage of time, mounting office expenses and dwindling staff resources, Independent Counsel decided not to prosecute certain individuals. Prosecutorial decisions were based, primarily on the seriousness of the crimes, the certainty of the evidence, the likelihood that the targeted individual could provide valuable information to the investigation, and the centrality of the individual to the Iran/contra events.

Independent Counsel's decision to pursue the investigation beyond the Poindexter trial resulted in these major findings:

*that there was extensive knowledge of North's contra-support activities by high-ranking officials in the C.I.A., State and Defense departments

*that false testimony was given to, and highly relevant documents were withheld from, the Congressional and criminal Iran/contra investigations, despite representations of cooperation by the Reagan and Bush Administrations

*that, contrary to their testimony, Bush, Shultz and Weinberger were kept informed of the details of the Iran arms sales and

*that senior Administration officials in November 1986 were being invited to conceal President Reagan's involvement in the November 1985 Hawk missile shipment to Iran by Attorney General Meese who believed that it was possibly illegal. . . . Investigations and Cases: The National Security Council Staff

At the center of the covert Iran and contra operations were three members of President Reagan's National Security Council staff: National Security Adviser Robert C. McFarlane McFarlane's deputy and successor, Vice Adm. John M. Poindexter and the deputy director of political-military affairs: Lieut. Col. Oliver L. North.

It is the duty of the national security adviser to brief the President daily on foreign and domestic developments of national security concern, and to integrate and keep him apprised of the views of his National Security Council. The national security adviser heads the N.S.C. staff. The principal members of the N.S.C. in the Iran/contra matters were the President, the Vice President, the Secretaries of State and Defense and the Director of the C.I.A.

Beginning in 1984 through most of 1986, members of the N.S.C staff implemented President Reagan's foreign-policy directive to keep the Nicaraguan contras alive as a fighting force, despite a law -- the Boland Amendment -- prohibiting U.S. aid for their military activities. Largely acting through North, there contra-support activities included approaches to foreign countries and private American citizens for funding the provision of military and tactical advice and intelligence and working with private operatives, chiefly retired Air Force Maj. Gen. Richard V. Secord and Albert Hakim, to supply weapons.

In 1985, in what was originally a separate undertaking from the contra-support operation, McFarlane initiated contacts with Israel leading to the sale of U.S. weapons to Iran in an effort to free American hostages held by pro-Iranian terrorists in Beirut in 1986, the N.S.C. staff under Poindexter continued in this effort through direct U.S. arms sales to Iran. Poindexter authorized North to arrange the diversion of Iran arms sales proceeds to the contras, secretly marking up the prices for U.S. weapons and relying on the excess proceeds to help finance the contra resupply operation, subsequently called the "Enterprise," which was run by Secord and Hakim under North's direction.

The N.S.C. staff members in these operations could not have carried out many of their activities without the support or knowledge of officials in other agencies: most prominently the C.I.A., State Department and the Department of Defense. Nevertheless, after public exposure, the Reagan Administration used the most dramatic dimension of the Iran/contra affair -- the Iran/contra diversion -- to focus public attention and to blame the N.S.C. staff for what went wrong. On November 25, 1986, President Reagan announced the firing of North and the resignation of Poindexter. Attorney General Edwin Meese III then disclosed the Iran/contra diversion, erroneously stating that only three U.S. officials knew about it: North, Poindexter and McFarlane.

The criminal prosecutions showed that members of the N.S.C. staff, although most directly involved in the operations, were not the only participants in Iran/contra matters. Rather, these matters often were not aberrant acts but part of a widespread pattern of covert conduct condoned at the highest levels of Government. . . . President Reagan

It was concluded that President Reagan's conduct fell well short of criminality which could be successfully prosecuted. Fundamentally, it could not be proved beyond a reasonable doubt that President Reagan knew of the underlying facts of Iran/contra that were criminal or that he made criminal misrepresentations regarding them.

President Reagan created the conditions which made possible the crimes committed by others by his secret deviations from announced national policy as to Iran and hostages and by his open determination to keep the contras together "body and soul" despite a statutory ban on contra aid. . . .

No direct evidence was developed that the President authorized or was informed of the profiteering on the Iran arms sales or of the diversion of proceeds to aid the contras. Yet, it was doubtful that President Reagan would tolerate the successive Iranian affronts during 1986 unless he knew that the arms sales continued to supply funds to the contras to bridge the gap before the anticipated Congressional appropriations became effective. Only Poindexter could supply direct evidence, and he denied passing on this information. The wide destruction of records by North eliminated any possible documentary proof.

As with the Iran initiative, President Reagan was apparently unconcerned as to the details of how his policy objectives for contra support were being carried out by subordinates who were operating virtually free from oversight or accountability. . . .

Independent Counsel found no prosecutable evidence that the President expressly authorized or was informed of the illegal features of North's operational participation in the covert contra-resupply operation and his financing of the operation. President Reagan was aware of and even encouraged some aspects of external funding for the contras, such as solicitation of aid from third countries and contributions from private benefactors. He also was aware that North was the N.S.C.'s action officer on the contras, and he was regularly briefed on the growth of the contra movement during the period when funds to assist the contras were cut off by Boland. . . . Military and Paramilitary Support to the Contras, October 1984 to October 1986

The Administration was advised by the Attorney General that, absent a quid-pro-quo arrangement, soliciting third-country contributions which would be paid directly to the contras would not violate Boland restrictions. It would obviously be difficult to proceed criminally against a President who operated on the basis of what he considered sound legal advice. . . .

The President denied unequivocally that he was aware of the diversion of funds from the proceeds of the Iran arms sales, or that he authorized it. Independent Counsel could not prove the contrary. . . .

Domestic fund-raising for the contras presented a more complicated picture. There is no doubt that, at least beginning with his appearance at a dinner for the Nicaraguan Refugee Fund in April 1985 and continuing through mid 1986. President Reagan, like North, was a frequent and enthusiastic fund-raiser for contra-related causes. The President's appeals seem to have been confined to nonlethal, "humanitarian" aid. . . .

Proof of President Reagan's authorization or knowledge of North's illegal activities, beyond a reasonable doubt, would have required more than the nonspecific testimony that McFarlane and Poindexter were willing to give and that the few surviving documents would establish. The President's own activities on behalf of the contras were not on the face of it activities forbidden by criminal law. . . .

In the case of the two 1985 Israeli arms transfers, President Reagan knew from the outset that he was acting in conflict with his own announced policies of not rewarding hostage taking and of not selling arms to nations sponsoring terrorism. He knew this activity was politically and legally questionable. Two of his principal advisers, Secretary of Defense Caspar W. Weinberger and Secretary of State Shultz, both opposed the initiative for those and other reasons. Nonetheless, the President decided to proceed, and he directed that Congress not be notified. . . .

President Reagan's defiance, if it had been public, would have presented an outright constitutional confrontation with Congress. The question would have been the validity of a statutory restriction upon President Reagan's view of his constitutional powers as commander-in-chief and as the officer responsible for dealing with foreign nations.

Without any criminal sanction specifically provided for A.E.C.A. violations, the question was whether this secret noncompliance with the A.E.C.A. could be said to be a conspiracy to defraud the United States by the President and those assisting him in carrying out the transaction. In Independent Counsel's judgment, prosecution for such noncompliance would not have been appropriate. . . . The October-November 1986 Coverup of Iran/Contra

Independent Counsel could not prove that President Reagan knew there was Government involvement in the Hasenfus operation. He apparently had been told by Poindexter on several occasions that there was none. . . .

As far as is known, no one on the inside sought to protect the President's credibility by telling him the truth or warning him against falsely denying a U.S. connection. . . .

The foregoing facts would suggest that the President, during the first three weeks in November 1986, knowingly participated or at least acquiesced in the efforts of Casey, Poindexter and North to minimize or hide his advance approval of and participation in the 1985 Israeli arms shipments to Iran without notice to Congress.

Yet, such a conclusion runs against President Reagan's seeming blindness to reality when it came to the rationalization of some of his Iran, and hostage policies. The portrayal of President Reagan in the notes of Regan and Weinberger, and Shultz's readouts to Hill, not only the November 24, 1986, meeting but beginning at least on December 7, 1985, show a consistent reiteration of the President's position. The simple fact is that President Reagan seems not to have been ashamed of what he had done. He had convinced himself that he was not trading arms for hostages, that he was selling arms to develop a new opening with Iran, and that the recovery of the hostages was incidental to a broader purpose. He disdained the restrictions of the Arms Export Control Act. He made that clear as he brushed off Weinberger's concerns about illegality on December 7, 1985. At the November 24, 1986, meeting he was "v [ ery ] hot under the collar & determined he is totally right."

In his deposition given to Independent Counsel in July 1992, his responses were still consistent with that position. His memory had obviously failed. He had little recollection of the meetings and the details of the transactions. When his diary notes or other documents were presented to him which expressed his 1985 and 1986 position, he was again firm in his statements that they sounded like something he would have said and that he still believed them to be true. . . .

While there is a substantial amount of failure to recall and vagueness in the President's responses, both to the interrogatories and in his later deposition in the Poindexter trial, this standing alone does not warrant a criminal charge. By July 1992, when Reagan agreed to a final, extensive interview with Independent Counsel, it was obvious that the former President truly lacked specific recollection of even the major Iran/contra events which took place in 1984-1987. . . . Former President Reagan's Reply

President Reagan has never publicly criticized any aspect of the investigation or conduct of Independent Counsel Walsh. . . . It is now appropriate and necessary for former President Reagan to respond.

As many others have commented, and as his final report reveals, the Independent Counsel has permitted his investigation to become both excessive and vindictive. He has abused his authority. He has used his office to intimidate and harass individuals and otherwise to damage the lives of the persons he was given license to investigate. He and his final report have violated the policies of the Department of Justice that he was required by law to uphold, and he has disregarded the standards and ethics imposed uniformly on public prosecutors. . . .

Independent Counsel Walsh found no credible evidence of personal wrongdoing by President Reagan or violation by the former President of any criminal laws. . . . Yet in his final report the Independent Counsel attempts to indict President Reagan for alleged misconduct by others and to hint, without the benefit of any evidence, at wrongdoing by the former President himself. . . . Except for matters already considered by Congress and the courts, the Independent Counsel's speculation and conclusions regarding alleged misconduct by many individuals, including former President Reagan, are without foundation, and reflect, at best, a misunderstanding of the events he has investigated and a slanted and completely misleading rendition of them. George Bush

On December 24, 1992, 12 days before former Secretary of Defense Caspar W. Weinberger was to go to trial, Bush pardoned him. In issuing pardons to Weinberger and five other Iran/contra defendants, President Bush charged that Independent Counsel's prosecutions represented the "criminalization of policy differences."

The criminal investigation of Bush was regrettably incomplete. . . .

In light of his access to information, Bush would have been an important witness. In an early interview with the F.B.I. in December 1986 and in the O.I.C. deposition in January 1988, Bush acknowledged that he was regularly informed of events connected with the Iran arms sales, including the 1985 Israeli missile shipments. These statements conflicted with his more extreme public assertions that he was "out of the loop" regarding the operational details of the Iran initiative and was generally unaware of the strong opposition to the arms sales by Secretary of Defense Weinberger and Secretary of State George P. Shultz. He denied knowledge of the diversion of proceeds from the arms sales to assist the contras. He also denied knowledge of the secret contra-resupply operation supervised by North. . . .

The personal diary of Vice President Bush was disclosed to Independent Counsel only in December 1992, despite early and repeated requests for such documents. This late disclosure prompted a special investigation into why the diary had not been produced previously, and the substance of the diary.

Following the pardons, Bush refused to be interviewed unless the interview was limited to his nonproduction of his diary and personal notes. Because such a limited deposition would not serve a basic investigative purpose and because its occurrence would give the misleading impression of cooperation where there was none, Independent Counsel declined to accept these conditions. A grand jury subpoena was not issued because the O.I.C. did not believe there was an appropriate likelihood of a criminal prosecution. Bush's notes themselves proved not as significant as those of Weinberger and Shultz aides Charles Hill and Nicholas Platt, and the statute of limitations had passed on most of the relevant acts and statements of Bush. . . .

When Bush became aware of Shultz's note production, he responded as follows in his personal diary:

"Howard Baker in the presence of the President, told me today that George Shultz had kept 700 pages of personal notes, dictated to his staff . . . notes on personal meetings he had with the President. I found this almost inconceivable. Not only that he kept the notes, but that heɽ turned them all over to Congress. . . . I would never do it. I would never surrender such documents and I wouldn't keep such detailed notes."

This note, which was not among selected diary notes Bush released publicly in 1993, would have been used to question Bush about his cooperation with investigators if he had consented to the requested Independent Counsel deposition in 1993. . . .

While President Bush made numerous public statements extolling his cooperation with the Independent Counsel's investigation, that, in fact, had not been the case: Inside the White House it appears he had little intention of cooperating with Independent Counsel. In August 1992, there were discussions among White House counsel about not allowing the O.I.C. to interview President Bush. According to Janet Rehnquist:

This matter was discussed among Lytton, Schmitz, Gray and Rehnquist. Their position was they were going to tell the O.I.C. to "pound sand" on the Bush interview issue. Their position was that interviews had already been done, that an election was going on and that enough was enough.

Former President Bush's Reply

The investigation conducted by the Office of Independent Counsel under Judge Lawrence Walsh has largely been an inquiry into a political dispute between a Republican Administration and a Democratic Congress. . . .

President Bush has always acknowledged that he was aware that arms were sold to Iran. . . . Inexplicably, however, the report contends that President Bush's public statements conflicted with his deposition testimony and F.B.I. interview, all of which reflected his knowledge of the Iran arms sales. The report is simply wrong. . . .

The report implies that President Bush was aware that his diary dictation was responsive to the O.I.C.'s document requests and purposefully did not produce the material. . . . When the diary was discovered in a personal safe by Patty Presock in September 1992, President Bush, who was in the middle of the campaign, immediately stated: "Let's call Boyden [ Gray, his counsel ] and he can sort it out." Mr. Gray subsequently reviewed and turned over the diary to the O.I.C. . . .

Three months before the pardons (were) issued, the O.I.C. represented to the Special Panel that the investigation was finished. Thereafter, no circumstances changed that warranted another deposition of President Bush. Certainly, the diary produced in December 1992 did not warrant an additional deposition on the substance of Iran-contra. The O.I.C.'s own report stated: "They (the diaries) did not justify re-opening the investigation." . . .

President Bush's knowledge of Iran-contra has been explored to exhaustion. . . . The O.I.C.'s suggestion that the investigation of President Bush was "regrettably incomplete" is nonsense.

Secretary of State Shultz . . .

The best evidence of Department of State knowledge of U.S. dealings with Iran comes from Hill and Platt's notes. It was their job to bring important information to the attention of Shultz and to communicate to others his guidance and questions. Both Hill and Platt took minute-by-minute notes that document this exchange of information in remarkably detailed fashion. . . .

The 1990 review of Hill's notebooks resulted in the O.I.C. keeping copies of a much greater volume of relevant notes than the Department of State had produced in response to the O.I.C. and Congressional requests in 1986 and 1987. The O.I.C. continued to assume the accuracy of Shultz's well-known testimony regarding his exclusion from information regarding arms shipments to Iran and his (and Hill's) seeming cooperation with the Iran/contra investigation. . . .

It was not until the summer and fall of 1991, in connection with the accelerating investigations of (Elliot) Abrams and several C.I.A. officials, that the O.I.C. realized that Hill's notes were inconsistent with Shultz's testimony. Further investigation revealed that Hill had not produced these notes in 1986 and 1987, and that Platt had not produced corresponding notes of many of the same events. The O.I.C. later obtained notes from other Department of State officials that also had not been produced to Iran/contra investigators. . . .

November 1985, when he said he knew arms sales were debated but was not informed that any took place from December 1985 to May 1986, when he said he knew the United States was attempting to open a dialogue with Iran but was unwilling to sell arms and from May 4 to November 3, 1986, when he received no information of arms transfers. In essence, Shultz's testimony centered more on what he did not know than on what he did it laid the groundwork for the widely held misperception that he and other Department of State officials were largely ignorant of the Iran arms shipments. . . .

The evidence contained in contemporaneous notes supports the thesis that Shultz and others in the department opposed the initiative. But it does not support the commonly accepted corollary: that they were prevented from monitoring the initiative. In fact, Shultz and his senior officials did monitor the initiative. As a result, Shultz and other top department officials had a far better understanding of the initiative than their testimony suggests. Moreover, significant aspects of Shultz's testimony were incorrect: Shultz learned in "phase one" that arms had been shipped Shultz repeatedly complained during "phase two" that arms were still on the table and there is strong evidence that, during "phase three," Shultz learned in both late May and late July that arms had been shipped to Iran in exchange for the release of hostages. The evidence shows that Shultz's characterization of each of the three phases set out in his testimony was incorrect: Shultz and others in the department were substantially better informed during each of the three phases than he stated. . . .

Hill's note shows that Shultz was informed that arms transfers in fact had been consummated in connection with the release of Weir. Thus, although Shultz stated as recently as February 1992 that he still believed that Weir was released to bring pressure on Kuwait to release the Dawa prisoners, and not because of the Israeli arms shipments, he could not maintain that he was never informed that Israel made arms shipments at or before the time of the Weir release. . . . Conclusion

Independent Counsel's investigation established that central and important aspects of Shultz's testimony to Congressional committees in late 1986 and 1987 regarding his knowledge of arms shipments to Iran were incorrect.

Shultz's carefully prepared testimony stated that he received no information regarding arms transfers to Iran during 1985 and 1986. It conveyed the impression that, because of his steadfast opposition to proposals to transfer arms to Iran, National Security Advisers McFarlane and Poindexter and the N.S.C. staff had successfully concealed information from Shultz and the Department of State regarding actual arms transfers to Iran.

The contemporaneous handwritten notes of Hill and Platt demonstrate the inaccuracy of Shultz's assertions and the popular impression regarding his knowledge. . . .

Notwithstanding the gravity of Shultz's errors while testifying before Congress in 1986 and 1987, Independent Counsel declined to prosecute because the evidence did not establish beyond a reasonable doubt that his testimony was willfully false. . . . Mr. Shultz's Reply

The report is an unwarranted attack on a faithful public servant who tried to prevent the arms-for-hostages debacle from its outset, who took the initiative to disclose to Congress the full story as he knew it, and who finally succeeded in bringing it to a halt. . . .

After the revelations in November 1986, the Secretary argued strongly for full, prompt, and complete disclosure of the facts relating to the Iran arms sales and the contra diversion. This commitment to full public disclosure brought his almost immediately into conflict with others in the Administration. . . .

While these Hill and Platt notes do report on arms-for-hostages information not mentioned in the Secretary's testimony, much of this information varied in quality from rumor to hearsay, and its omission did not materially alter the main thrust of the Secretary's testimony. . . .

Because the report itself acknowledges all of these facts, it is a serious distortion for the report to suggest that the Secretary gave incorrect and misleading testimony for which he was not prosecuted only because a charge of falsity could not have been proven "beyond a reasonable doubt." The truth is that any such charge stands totally disproved by the other findings of the report. The testimony reflected fully the information available to the Secretary at that time. Caspar W. Weinberger

Defense Secretary Caspar W. Weinberger lied to investigators to conceal his knowledge of the Iran arms sales. Contrary to Weinberger's assertions, a small group of senior civilian officials and military officers in the Department of Defense, comprised of Secretary of Defense Caspar W. Weinberger and his closest aides, was consistently informed of the arms shipments to Iran in 1985 and 1986.

The O.I.C. uncovered documents and notes and obtained testimony, which had been withheld from the Tower Commission and the Select Committees. The most important new evidence was Weinberger's own detailed daily diary notes and his notes of significant White House and other meetings regarding arms shipments to Iran. These notes, along with withheld notes of other Administration officials and additional documents that were obtained from D.O.D., revealed that Weinberger and other high-level Administration officials were much more knowledgeable about details of the Iran arms sales than they had indicated in their early testimony and statements.

This evidence formed the basis for the 1992 indictment of Weinberger. It also provided Independent Counsel with valuable, contemporaneous information concerning high-level participation in Iran/contra activities. . . .

On October 10, 1990, Weinberger, accompanied by his counsel, was interviewed by the O.I.C. attorneys in the presence of an F.B.I. Special Agent. . . .

Between the October and December 1990 interviews, the O.I.C. obtained Weinberger's permission to review his papers at the Library of Congress. Assuming that any documents relating to Iran/contra were classified and relying on Weinberger's statements that the few notes he took were scribbled on the back and margins of documents in his briefing books, O.I.C. investigators asked both D.O.D. and Library of Congress personnel where such materials would be located. The investigators were directed to the classified subject list in the library's index to the Weinberger collection. Investigators found no collection of notes among the materials they examined.

When O.I.C. investigators returned to the Library of Congress in November 1991, they reviewed the entire index and found thousands of pages of diary and meeting notes that Weinberger had created as Secretary of Defense. These notes, which contained highly classified information, had been stored in the unclassified section of the Weinberger collection.

Weinberger's notes proved to be an invaluable contemporaneous record of the views and activities of the highest officials regarding those sales. They revealed, among other things, that contrary to his sworn testimony, Weinberger knew in advance that U.S. arms were to be shipped to Israel in November 1985 without Congressional notification, in an effort to obtain the release of U.S. hostages, and that Israel expected the United States to replenish the weapons Israel shipped to Iran. Weinberger's notes also disclosed that, contrary to his sworn testimony, he knew that Saudi Arabia was secretly providing $25 million in assistance to the contras during a ban on U.S. aid. . . .

The Government's trial evidence would have demonstrated that, contrary to the impression created by his false testimony before Congress, Weinberger was a knowing participant in the initiative to send arms to Iran in return for the release of Americans held hostage in Lebanon. .. .

Count Five charged Weinberger with making false statements in the October 10, 1990, interview with members of Independent Counsel's staff and a special agent of the F.B.I. . . .

During the interview, Weinberger was asked repeatedly, in several different ways, about his note-taking practices. He insisted that he rarely took notes that, as a rule, he did not take any notes when he met with the President or other Cabinet members and that he specifically did not take any notes during meetings concerning the Iran arms sales. . . .

To establish the deliberate falsity of Weinberger's statements, the Government would have proved at trial that (1) Weinberger maintained voluminous notes of meetings and phone calls, many of which were relevant to Iran/contra (2) Weinberger knew in 1987 of Congressional requests for his notes and diaries but produced none of them, and went so far as to lie under oath to conceal their existence from Congressional investigators and (3) on his retirement as Secretary of Defense, Weinberger privately deposited his notes in the Library of Congress where no one could see them without his permission. . . . Mr. Weinberger's Reply

Notwithstanding former President Bush's pardon almost 12 months ago, and the district court's subsequent dismissal of the charges against him, Mr. Weinberger still confronts a segment of a lengthy report written by Mr. Walsh that asserts he committed various criminal offenses. The very fact that Mr. Weinberger must respond to this report represents, as further described below, the final chapter in a longer line of prosecutorial abuses by Mr. Walsh and his staff. . . .


IRAN-CONTRA REPORT CASTIGATES REAGAN

A seven-year investigation of the Iran-contra scandal produced "no credible evidence that President Reagan violated any criminal statute," but concluded that Reagan "set the stage for the illegal activities of others" by encouraging them to win freedom for American hostages in Lebanon and arm the contra rebels in Nicaragua, independent counsel Lawrence E. Walsh said yesterday.

Once the public learned in late 1986 of the secret arms-for-hostages dealings with Iran and the clandestine funding for the contras, "Reagan administration officials deliberately deceived the Congress and the public about the level and extent of official knowledge of and support for these operations," Walsh said in his final report on the affair, released yesterday.

While he uncovered no proof that Reagan committed any crimes, Walsh said at a news conference that impeachment "certainly should have been considered." In his report, Walsh said it is appropriate to consider impeachment "in cases of conduct involving political objectives rather than venal objectives" because impeachment "brings into play the political judgment of both houses of Congress."

Reagan, Walsh said, "created the conditions which made possible the crimes committed by others by his secret deviations from announced national policy as to Iran and hostages and by his open determination to keep the contras together 'body and soul' despite a statutory ban on contra aid."

A congressional investigation of Iran-contra, Walsh said, went down the wrong paths, in part because of the Reagan administration's coverup. Walsh said Congress's 1986-87 inquiry had been complicated by the withholding of literally thousands of "contemporaneous notes and documents" by top government officials -- a factor that he said also unduly prolonged his own inquiry.

Walsh said his investigation discovered "large caches of previously withheld contemporaneous notes and documents, which provided new insight into the highly secret events of Iran-contra. Had these materials been produced to congressional and criminal investigators when they were requested in 1987, independent counsel's work would have proceeded more quickly and probably with additional indictments."

Walsh's 566-page report was made public by the new members of the special three-judge panel that appointed him in December 1986. Also released were a volume of supplementary material and a 1,150-page compendium of responses from Reagan and others who took issue with the findings, often denouncing Walsh for accusing them of crimes he couldn't prove in court. Another volume of classified material, primarily concerning CIA activities in Central America, was not released.

In his report and in his news conference, Walsh was particularly critical of former president George Bush, who served as Reagan's vice president.

At the press session, Walsh called Bush's decision to pardon former defense secretary Caspar W. Weinberger and five other Iran-contra figures on Christmas Eve 1992 "an act of friendship or an act of self-protection" the pardon prevented a trial of Weinberger at which Bush would have been called as a witness. Walsh had envisioned the Weinberger trial as his best chance to establish a high-level coverup by using long-withheld documents, such as notes kept by Weinberger, former secretary of state George P. Shultz, former White House chief of staff Donald T. Regan and former White House counsel Peter Wallison.

In his report, Walsh said his investigation did not find evidence proving that Bush "violated any criminal statute" but said Bush had refused to cooperate in the final stages of the independent counsel's investigation.

"Do you think that Presidents Reagan and Bush still have a lot to answer for?" Walsh was asked at his news conference.

"I think President Bush will always have to answer for his pardons," Walsh replied. "There was no public purpose served by that. . . . President Reagan, on the other hand, was carrying out policies that he strongly believed in. He may have been willful, but he, at least he thought he was serving the country in what he did, and the fact that he disregarded certain laws and statutes in the course of it was not because of any possibly self-centered purpose."

In a 126-page response, Reagan called the report "an excessive, hyperbolic, emotional screed that relies on speculation, conjecture, innuendo and opinion instead of proof."

Bush's lawyer, former attorney general Griffin B. Bell, said in reply that Bush "fully cooperated" with Walsh's office.

The Iran-contra scandal came to light in October and November of 1986 with the exposure of two secret Reagan administration operations: the provision of lethal aid for the contra rebels during a congressional ban on such assistance, and a series of secret arms-for-hostages deals with Iran in violation of stated U.S. policy. The two covert actions merged in late November 1986 when the White House disclosed that some of the profits from the arms sales had been diverted to the contras.

Walsh, an 82-year-old former federal judge and a lifelong Republican, ended up prosecuting 14 individuals and investigating 17 others. His report, required by law to include his reasons for not prosecuting subjects of his inquiry, contains many new details, including previously secret grand jury testimony and excerpts of diary entries and notes kept by Reagan and other top officials in his administration.

The chief focus of Walsh's report is on what he says was the Reagan administration's deliberate deception of Congress and the public "about the level and extent of official knowledge of and support for" the arms sales to Iran and the contra resupply operation.

Walsh said his investigation in its final years resulted in the discovery of "significant evidence" about the coverup that began in November 1986. In the end, Walsh said he concluded that "the president's most senior advisers and the Cabinet members participated in the strategy to make National Security Council staff members McFarlane, North, and Poindexter the scapegoats whose sacrifice would protect the Reagan administration in its final two years."

One of Shultz's former top aides, Charles Hill, kept voluminous, painstakingly detailed notes of conversations between high-level State Department officials and Shultz's reports of meetings he had with the president and other top administration officials. It was Hill's notes that led to the discovery in 1991 of Weinberger's notes and ultimately to the indictment of the former defense secretary on charges of perjury, false statements and obstruction of a congressional investigation.

Hill's notes also led to discovery of notes kept by Nicholas Platt, another high-ranking State Department official. Together, Walsh said, the State Department documents contradicted Shultz's own congressional testimony in 1986 about the arms sales to Iran. In re-interviews in 1992, the report said, Shultz "acknowledged the accuracy of the Hill notes, agreed that they were relevant and should have been produced, and stated that if he had reviewed them prior to his testimony before Congress, his testimony would have been very different.

"He admitted that portions of his testimony were wrong," Walsh added.

In 1992, Walsh also found notes of Regan that had not previously been produced. According to the report, these showed that former attorney general Edwin Meese III stated at a crucial White House meeting that a November 1985 shipment of Hawk missiles to Iran was probably illegal. The Regan notes, along with an account of the same meeting given to Hill by Shultz, became the basis for a renewed 1992 investigation by Walsh into Meese's role in the alleged coverup.

Still other evidence concerning Meese, the report said, came from notes kept by Wallison, a close associate of Regan and the top White House lawyer in November 1986. Wallison was convinced that the 1985 shipments had been a violation of the U.S. Arms Export Control Act. Wallison wrote in his diary that he was "unhappy" with a public statement issued by the White House in November 1986 asserting that no law had been violated by the Iranian arms sales.

"I was told that this is what the AG wanted said," Wallison recorded in his diary. According to Walsh, Wallison later raised concerns about a conflict of interest when he was told Meese had been designated by the White House to investigate the arms sales to Iran.

Walsh said he did not learn of Meese's key statements at the White House until late in his investigation. "Six years after the pivotal events had occurred, the trail was cold," Walsh said in his report. "With the principals professing no memory of often critical events, the OIC did not uncover sufficient evidence of an obstruction to justify a prosecution."

In an important sense, Walsh said, the strategy to make North, McFarlane and Poindexter the scapegoats succeeded. "Independent Counsel discovered much of the best evidence of the coverup in the final year of active investigation, too late for most prosecutions," the report said.

In his response to the report, Meese said that "at no time did the attorney general initiate or participate in any coverup of any aspect of what has become known as the Iran-contra matter." He denounced the report as not only "a grand delusion riddled with false statements, but an unconscionable act of deception intended to cover up Walsh's own unethical and illegal conduct."

At his news conference, Walsh said it was "very disturbing" for him to be pointing fingers at people he didn't prosecute, but justified it as a requirement of the independent counsel law designed to make such prosecutors fully accountable for their actions, both in what they did not do as well as what they did. He said the provision was enacted out of congressional concerns following the Watergate investigation when special prosecutors issued "a rather condensed report" and then went on to write books about their work.

Walsh also acknowledged that he made "some mistakes of judgment" in the course of the $36 million inquiry, particularly at the beginning when "I thought I could handle it with 10 lawyers." He said he did not expand his staff significantly until Congress began talking of granting immunity to key figures such as North and Poindexter, a step that ultimately resulted in the voiding of their criminal convictions.

For the first time, Walsh publicly discussed his view that Reagan believed he was acting in the public interest, even if wrongheadedly. Walsh said the bare facts would suggest Reagan had "knowingly participated or at least acquiesced" in a coverup, but "such a conclusion runs against President Reagan's seeming blindness to reality when it came to the rationalization of some of his Iran and hostage policies. . . .

"The simple fact is that President Reagan seems not to have been ashamed of what he had done," Walsh said. "He had convinced himself that he was not trading arms for hostages."

Recalling his last questioning of Reagan in July 1992, Walsh said the former president's "memory had obviously failed. He had little recollection of the meetings and details of the transactions" even when his own diary notes were read back to him.

By contrast, Walsh charged in his report that Bush apparently "had little intention of cooperating with the independent counsel" in the final stages of the investigation. According to a 1993 FBI interview with a former associate White House counsel for Bush, Janet Rehnquist, lawyers in the White House had decided to tell Walsh's prosecutors to "pound sand" in response to interview requests.

"Their position was that interviews had already been done, that an election was going on and that enough was enough," the FBI report of the intervew stated. After the election, Bush insisted that any interview be limited to his failure to tell prosecutors until mid-December 1992 about a diary he kept during the Iran-contra period.

As a result, Walsh said, "the criminal investigation of Bush was regrettably incomplete." He said his only recourse, a grand jury subpoena of the former president, would have been inappropriate, in part because it would have smacked of retaliation for the pardons.

Responding for Bush, Bell said that Walsh "refused to consider any reasonable limitations" on the scope of the questions.

Staff writer Dan Morgan and researcher Ann O'Hanlon contributed to this report.

Assertions by Iran-contra independent counsel Lawrence E. Walsh drew rebuttals from principal figures in the affair.

Ronald Reagan, former president

Assertions by Walsh: Most of the president's early statements proved to be incorrect or misleading.

Rebuttal: The president and his advisers repeatedly disclosed the essential facts of the arms sales to Iran. The president was unaware of the diversion of funds to the contras until the attorney general discovered it in the course of an internal investigation.

George Bush, former president

Assertions by Walsh: "Contrary to his public pronouncements, he was fully aware of the Iran arms sales . . . and he participated in discussions to obtain third-country support for the contras."

Rebuttal: "By seeking to craft criminal violations from a political foreign policy dispute, was cast in a biased position from the beginning."

Edwin Meese III, former attorney general

Assertions by Walsh: The attorney general spearheaded a conspiracy to cover up the president's knowledge of a possibly illegal November 1985 U.S. shipment of Hawk missiles to Iran.

Rebuttal: The Walsh report is a product of the independent counsel's "infirm musings about some Oliver Stone-type conspiracy." Meese took numerous steps to ascertain the full details of the November shipment.

Caspar W. Weinberger, former defense secretary

Assertions by Walsh: He hid his notes and took part in an attempted coverup of the possibly illegal 1985 shipment of Hawk missiles to Iran.

Rebuttal: Walsh is engaged in a "massive effort to rewrite history and resurrect his reputation." His report rehashes charges for which Weinberger was pardoned by Bush.

George P. Shultz, former secretary of state

Assertions by Walsh: He held back information pertinent to the sales of arms to Iran.

Rebuttal: Shultz argued against the initiative and was the Cabinet official who informed Meese of Reagan's knowledge of the 1985 Hawk shipment to Iran.

Oliver L. North former NSC aide and retired Marine officer.

Assertions by Walsh: He was the White House official most directly involved in aiding the contras, selling arms to Iran and diverting proceeds to the contras, and was allowed by his superiors to operate with "unprecedented latitude."

Rebuttal: No written response included in the final report.

John M. Poindexter, former national security adviser to Reagan.

Assertions by Walsh: The jury that convicted him of five felonies "showed that ordinary citizens . . . agree that obstructing and lying to Congress is a serious act."

Rebuttal: All the convictions were set aside, yet the report employs a "pro-prosecution spin at every turn" and attempts to discredit the appeals court's reversal of the conviction.

Robert C. McFarlane, former national security adviser to Reagan

Assertions by Walsh: He put his subordinates in a difficult position by delegating to them the job of carrying out Reagan's directive to keep the contras fighting despite a cutoff of U.S. aid, then lied about North's activities.

Rebuttal: "I did not lie and was never charged with lying by the independent counsel."

Elliott Abrams, former assistant secretary of state

Assertions by Walsh: He was familiar with the secret financial channels used to pay for weapons and supplies for the Nicaraguan contras.

Rebuttal: The report "makes selective use of facts to justify its own actions."

Duane R. Clarridge, former CIA official

Assertions by Walsh: He made false statements to Congress about arms shipments to Iran.

Rebuttal: "Sticks and stones may break my bones, but the pitiful, feeble evidence of my alleged crimes presented in the Walsh report will never hurt me."

Shimon Peres, Israeli foreign minister

Assertions by Walsh: Israel was a key to the beginning and the continuation of the U.S. initiatives with Iran.

Rebuttal: The idea of an Iran initiative was raised not by Israelis, but by Michael Ledeen, a consultant to the National Security Council, during a meeting that Ledeen requested with Peres on May 3, 1985.

Yitzhak Rabin, prime minister of Israel, and former defense minister

Assertions by Walsh: He called national security adviser Robert C. McFarlane to help with the 1985 Hawk shipments.

Rebuttal: McFarlane returned a call from Rabin, who made clear that if it wasn't a joint U.S.-Israel operation, Israel wouldn't "pursue the matter further."

Richard V. Secord, retired major general who assisted NSC aide Oliver L. North

Assertions by Walsh: He was the key middleman and received $2 million in 1985-86 in direct personal benefits from the operation and more than $1 million in separate cash payments.

Rebuttal: Walsh is a "limelight seeking, self-aggrandizing, disgracefully invidious scoundrel."

Donald P. Gregg, former Bush security adviser and U.S. ambassador to South Korea.

Assertions by Walsh: He committed "acts of concealment."

Rebuttal: "I am deeply angered that . . . such a flawed, vindictive and biased report has been produced."


Iran-Contra Affair Essay

The Iran-contra affair involved an attempt by the National Security Council (NSC) of the Ronald Reagan administration to circumvent congressional limitations on aid to the contras (Nicaraguan guerrillas) and to secure the release of U.S. hostages held in the Middle East through the sale of arms to Iran. The revelation of this attempt undercut the popularity of the president and led to the indictment of several aides. The affair arose from parallel events in Central America and the Middle East. In Central America, the Reagan administration was supporting the contras, an amalgam of individuals and groups who opposed the Sandinista regime in Nicaragua. Despite a reputation for ineffectiveness and drug dealing, the contras were considered by the Reagan administration to be the best alternative to the Marxist Sandinistas. Congress passed the Boland Amendment in 1982, which prohibited funding for the “overthrow of the government of Nicaragua.” The amendment allowed humanitarian aid but specifically prohibited covert aid by the Central Intelligence Agency (CIA).

At the same time in the Middle East, terrorist organizations such as Islamic Jihad were increasing their harassment of U.S. citizens in response to the Israeli invasion of Lebanon and the U.S. organization of a United Nations peacekeeping force in Beirut. Over a dozen U.S. citizens were kidnapped and taken hostage between 1982 and 1984. The Reagan administration responded to this provocation by vowing never to negotiate with terrorists, while blaming the Iranians for supporting these organizations.

Additionally the Iranians were locked in a war with the Saddam Hussein–led country of Iraq. Running from 1980 to 88, the Iran-Iraq War would be bloody but ultimately inconclusive. In the course of the fighting the Iranians began to run into a significant problem. Most of their military hardware had been purchased from the United States before the 1979 overthrow of the shah. As the war dragged on, Iran began to run short of ammunition and spare parts, which they could not acquire from the United States because of a congressional ban on arms sales to the Iranians stemming from the hostage crisis of 1979–81.

The NSC, led by National Security Advisor John Poindexter and CIA director William Casey, proposed the following arrangement to the president and his advisers. Through private arms dealers and Israel, the United States would sell arms to the Iranians above cost. In return, the United States expected Iran to pressure the terrorists to free the U.S. hostages. The profits from the arms sales would be secretly diverted to the contras to keep their activities afloat. Reagan approved the idea despite opposition from Secretary of State George Shultz and some dissent from Secretary of Defense Caspar Weinberger.

The first arms shipments took place in 1985, and more were sent in 1986. Despite pressure and apparent promises, only one hostage and the body of a second were released. The money and additional supplies were funneled to the contras until October 1986, when a CIA chartered plane crashed in Nicaragua. Its pilot confessed to running supplies to the contras. On November 3 a Lebanese journal, Al-Shira, revealed the existence of the arms sales to Iran. The Reagan administration acknowledged the existence of the arms sales and contra supplies in a speech by the president on November 13.

Witnesses such as NSC staff member Colonel Oliver North testified before both Congress and the Tower Commission, admitting to the arms sales and funding while portraying the president as a “hands-off” administrator. Reagan’s own appearance before the commission revealed the president’s shaky grasp of details and apparently poor memory of events. In the Tower Commission’s final report, the president’s lack of control over his staff was strongly criticized, but most of the blame for the scandal was placed on the National Security Council and its staff.


Iran-Contra Final Report

Staff members for the select Iran-Contra committee Casey Miller and Thomas Smeeton answered host and audience questions…

Iran-Contra Final Report

The leadership of the Joint select committee on Iran-Contra announced the release of the committee’s report on the affair.…

Iran-Contra Investigation Day 32

Answering questions from committee members, Poindexter says that the problem with the Iran initiative was in the exposure rather…

Iran-Contra Documents

Walter Pincus took viewer calls and discussed events of the day including the status of the investigation by congress…


The Archive Dive

Titles: NoHo March Against Crack News Coverage, June 1987

Publication: CBS-2 News NYC

Author/Writer: CBS-2 News staff/Jeremy Meyers - Youtube

Publication: The New York Times

Title: WAR ON DRUGS SHIFTING FOCUS TO STREET DEALS

Author/Writer: By Peter Kerr

The Top of The TV Charts of 1987

The Archive Dive (Cont’d)

Title: Tribute to Robert Parry, Investigative Journalist and Patriot

Author/Writer: Rick Sterling

Title: In 1987, a Secret Iraqi Warplane Struck an American Frigate and Killed 37 Sailors


Watch the video: Revisiting the Iran-Contra Affair: 30th Anniversary Special Report (January 2022).